Gold has posted gains in the Tuesday session. Currently, spot gold is trading at $1237.24 in the North American session. On the release front, construction numbers disappointed, as both Building Permits and Housing Starts were softer than expected.
Weak US numbers since last week have boosted gold prices, as many investors have sold US assets in return for safe-haven assets such as gold. The metal started the month of May with sharp losses, but has managed to stem the downward spiral, posting gains of 1.4% since May 11. Gold has continued to rally on Tuesday, following soft construction data in April. Building Permits dropped to 1.23 million, short of the forecast of 1.26 million. The news wasn’t any better from Housing Starts, which slipped to 1.17 million, compared to the estimate of 1.26 million. This marked the smallest number of housing starts since November 2016. Despite the weak numbers, demand for housing remains high, fueled by a labor market that is close to capacity and an unemployment of just 4.4 percent.
Gold has also benefited from the political firestorms in Washington, as the Trump administration continues to lurch from crisis to crisis. President Trump and his aides have preoccupied with damage control, as the White House and Congress remain focused on Comeygate, as the fallout from Trump’s dismissal of FBI director James Comey continues. There was more bad news for President Trump on Tuesday, with a report in the Washington Post that Trump had shared confidential intelligence reports with Russia’s foreign minister at a meeting last week. The White House has denied any wrongdoing, but the timing is particularly bad for Trump, who is already under investigation for possible Russian involvement in the presidential campaign. The markets are concerned that Trump will be so busy trying to put out political firestorms, that his agenda of increased fiscal spending and tax reform will stall. These jitters could hurt investor confidence and send gold prices to higher levels.
